Fighting Medicaid fraud

Covering all the angles

October 16, 2011

MAYVILLE - From providers to recipients, Chautauqua County has all angles covered when it comes to addressing Medicaid fraud and waste.

Article Photos

Chautauqua County Sheriff Joseph Gerace

Medicaid is one of the larger issues of concern for counties throughout the state. When running for office in 2005, County Executive Greg Edwards spoke of creating a Medicaid specialist position which would look at waste, fraud and abuse in organizations outside of county government.

The position, created in mid-2006, was described as a way to rein in Medicaid expenses, the cost of which are a contributing factor to the price of property taxes throughout the state.

In his tentative 2012 budget, Edwards has proposed the elimination of one investigator from the sheriff's Welfare Fraud Unit. As such, and in conjunction with another article appearing in today's edition, The Post-Journal questioned the county executive last week on the Medicaid specialist position.

In short, Edwards explained that the county has worked to merge, consolidate and refine its operations - finding ways to be less costly while saving money.

"We took and consolidated two obligations, the Medicaid specialist position and the Medicaid compliance officer," Edwards said. "In looking at this through the fresh perspective and obviously excellent work and capacity of Christine Schuyler, the Department of Health director and the Department of Social Services commissioner, she proposed, and I agreed, that the best way we could do this would be to use existing staff."

Each of the two positions, Edwards said, have been added to the duties of high-ranking, upper-level supervisors in the Department of Social Services and the Department of Health.

Additionally, both Edwards and Schuyler said that though the 2012 budget cuts a sheriff's investigator, the county is still going after fraud and waste - beefing up front-end detection rather than chasing down violators after the fact.

MEDICAID 'CZAR'

In July 2009, the vacant Medicaid specialist position became an issue of debate in the county executive's re-election bid against Democratic challenger Chuck Cornell.

At that time, the position had sat empty for longer than it was ever held by any hire.

After the position was created in 2006 and a search for a candidate was held, Edwards's first pick was withdrawn for undisclosed reasons in early 2007. The County Legislature later approved Edwards' second pick, Paul Bermel, an East Amherst resident, for the position of Medicaid specialist. Bermel held the post for less than a year, resigning in February 2008 to take a private sector job in Buffalo.

During his time as Medicaid specialist, Bermel established a 36-step process for going after Medicaid waste, fraud and abuse. Following that 36-step process with the county's Verify New York software and other resources, Edwards said Bermel was able to identify five providers who justified investigation.

The final step in the process was to request authorization from the state Office of the Medicaid Inspector General to investigations of the providers.

Authorization from the state never came though for Chautauqua County.

As explained by Edwards in 2009, the Office of the Medicaid Inspector General took Bermel's request and the information on the five providers and later returned a decision that the state would do the investigation. Such a decision equated to a financial loss for the county. One of the terms of investigations is that if the county, through someone like Bermel, conducts an audit and collects improper payments, the county is entitled to 25 percent."

The effectiveness of the position then drew criticism from Cornell and other county lawmakers after it sat vacant following Bermel's resignation. Edward's explained that it would have been filled sooner, but there was question on whether the state would continue to pay for it. Medicaid expenses are shared by the county and the state, with the local share's annual increase capped at $775,000 each year.

MEDICAID MERGER

Any provider of over 5,000 in Medicaid services must have, by state statute, a compliance plan and a compliance officer, Edwards told The Post-Journal on Thursday. The person in that position is in charge of internal audits to make sure that Medicaid dollars are being spent according to the rules and regulations of the Medicaid program.

Those duties of the Medicaid compliance officer, just as with the duties of the Medicaid specialist, Edwards said, have been added to the job descriptions of other DSS and Health Department workers.

"She proposed and I agreed that the best way we could do this would be to use existing staff," Edwards said of his and Schuyler's decision.

With the Medicaid specialist, the duties are to look at those organizations delivering services and submitting claims to assure that everything's being done according to the required practices.

"So we have two people who are up to it in their elbows every day," Edwards said of the work of the Medicaid compliance officer and Medicaid specialist. "So what we've been able to do is the specific jobs we wanted to accomplish with the specialist and the specific jobs we were required to do with the compliance officer with a portion of the time of some of our highest-level folks within this combined effort of the Department of Social Services and the Department of Health. And in the end, it's saving the state a lot of money."

FULL COVERAGE

Through its Medicaid specialist position, the county looks at outside organizations. Through its Medicaid compliance position, the county looks at itself. Additionally, through front-end detection, the county addresses Medicaid users before they begin receiving benefits. And, through the investigators conducted by the Sheriff's Office, the county goes after individuals wrongfully receiving benefits.

Both Edwards and Schuyler commented that the front-end detection yields better results than having investigators work after the fact, which is not a criticism of their work, Schuyler stressed.

"We work very closely with the sheriff's department and the district attorney's office, and we have a good relationship with them," Schuyler said. "And the budgetary decisions that we've made really have nothing to do with their job performance or anything else. When we had to make the tough call and I had to look at what we were getting on the front end versus what we're getting on the back end with the investigators, I made the decision to decrease our contract with the sheriff's department by one investigator."

And that does not mean that the county is not going after that fraud, Schuyler said. It's a switch to the front end and, additionally, the department will continue to contract for one investigator through the Sheriff's Office.

Schuyler summed it up by saying the department is going to be more actively going after fraud through prevention, but will still be conducting investigations and prosecuting fraud when it does occur.

"I've talked about this when it comes to health and this isn't much different," Schuyler said. "We have to look at prevention. It's a whole lot easier to prevent this sort of thing than it is to try to chase it after the fact. It's no different then it is a whole lot easier to prevent diabetes than it is to treat it, so it's kind of along the same line."

For the county executive, the bottom line is the savings.

"Do we want to invest $100,000 after the fact hiring an investigator to prosecute 17 claims which gets back a minute amount of money," Edwards said. "Or do we want to put our resources in the Front End Detection Services program to preclude people from incorrectly, intentionally or otherwise, getting benefits in the first place and saving millions.

"That's a pretty darn easy question," Edwards continued. "Do you want to prosecute people after the fact that, number one, rarely get prosecuted and, worse yet, don't have the resources to pay it back anyway? Or do you want to put it on the front end and prevent people from wrongly receiving those benefits."